BILL NUMBER: SB 511	CHAPTERED  09/24/00

	CHAPTER   616
	FILED WITH SECRETARY OF STATE   SEPTEMBER 24, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 23, 2000
	PASSED THE SENATE   AUGUST 30, 2000
	PASSED THE ASSEMBLY   AUGUST 29, 2000
	AMENDED IN ASSEMBLY   AUGUST 24, 2000
	AMENDED IN ASSEMBLY   AUGUST 18, 2000
	AMENDED IN ASSEMBLY   JUNE 19, 2000
	AMENDED IN SENATE   JANUARY 5, 2000
	AMENDED IN SENATE   JANUARY 3, 2000
	AMENDED IN SENATE   MAY 10, 1999

INTRODUCED BY   Senator Alarcon
   (Principal coauthor:  Assembly Member Havice)

                        FEBRUARY 18, 1999

   An act to amend Sections 7072 , 7073, and 7074 of, and to repeal
Section 7073.3 of, the Government Code, relating to economic
development.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 511, Alarcon.  Enterprise zones.
   The Enterprise Zone Act provides for the designation of enterprise
zones by the Trade and Commerce Agency according to specified
criteria, pursuant to which certain entities may receive regulatory,
tax, and other incentives for private investment and employment.  The
act provides for the designation of enterprise zones by the Trade
and Commerce Agency upon that agency's approval of applications from
a city, county, or city and county.  The act authorizes the expansion
of existing enterprise zones based upon certain criteria.
   This bill would authorize additional criteria upon which an
enterprise zone may be based, authorize a joint powers authority to
administer an enterprise zone, and require the Trade and Commerce
Agency to provide special consideration or bonus points, or both, to
enterprise zone applications meeting at least 2 of specified
demographic criteria.  This bill would revise the criteria for the
expansion of existing enterprise zones, as specified.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 7072 of the Government Code is amended to read:

   7072.  For purposes of this chapter, the following definitions
shall apply:
   (a) "Agency" means the Trade and Commerce Agency.
   (b) "Date of original designation" means the earlier of the
following:
   (1) The date the eligible area receives designation as an
enterprise zone by the agency pursuant to this chapter.
   (2) In the case of an enterprise zone deemed designated pursuant
to subdivision (e) of Section 7073, the date the enterprise zone or
program area received original designation by the agency pursuant to
Chapter 12.8 (commencing with Section 7070) or Chapter 12.9
(commencing with Section 7080), as those chapters read prior to
January 1, 1997.
   (c) "Eligible area" means any of the following:
   (1) An area designated as an enterprise zone pursuant to Chapter
12.8 (commencing with Section 7070), as it read prior to January 1,
1997, or as a targeted economic development area, neighborhood
development area, or program area pursuant to Chapter 12.9
(commencing with Section 7080), as it read prior to January 1, 1997.

   (2) A geographic area that, based upon the determination of the
agency, fulfills at least one of the following:
   (A) The proposed geographic area meets the Urban Development
Action Grant criteria of the United States Department of Housing and
Urban Development.
   (B) The area within the proposed zone has experienced plant
closures within the past two years affecting more than 100 workers.
   (C) The city or county has submitted material to the agency for a
finding that the proposed geographic area meets criteria of economic
distress related to those used in determining eligibility under the
Urban Development Action Grant Program and is therefore an eligible
area.
   (D) The area within the proposed zone has a history of
gang-related activity, whether or not crimes of violence have been
committed.
   (3) A geographic area that meets at least two of the following
criteria:
   (A) The census tracts within the proposed zone have an
unemployment rate not less than 3 percentage points above the
statewide average for the most recent calendar year as determined by
the Employment Development Department.
   (B) The county of the proposed zone has more than 70 percent of
the children enrolled in public school participating in the federal
free lunch program.
   (C) The median household income for a family of four within the
census tracts of the proposed zone does not exceed 80 percent of the
statewide median income for the most recently available calendar
year.
   (d) "Enterprise zone" means any area within a city, county, or
city and county that is designated as such by the agency in
accordance with the provisions of Section 7073.
   (e) "Governing body" means a county board of supervisors or a city
council, as appropriate.
   (f) "High technology industries" include, but are not limited to,
the computer, biological engineering, electronics, and
telecommunications industries.
   (g) "Resident," unless otherwise defined, means a person whose
principal place of residence is within a targeted employment area.
   (h) "Targeted employment area" means an area within a city,
county, or city and county that is composed solely of those census
tracts designated by the United States Department of Housing and
Urban Development as having at least 51 percent of its residents of
low- or moderate-income levels, using either the most recent United
States Department of Census data available at the time of the
original enterprise zone application or the most recent census data
available at the time the targeted employment area is designated to
determine that eligibility.  The purpose of a "targeted employment
area" is to encourage businesses in an enterprise zone to hire
eligible residents of certain geographic areas within a city, county,
or city and county.  A targeted employment area may be, but is not
required to be, the same as all or part of an enterprise zone.  A
targeted employment area's boundaries need not be contiguous.  A
targeted employment area does not need to encompass each eligible
census tract within a city, county, or city and county.  The
governing body of each city, county or city and county that has
jurisdiction of the enterprise zone shall identify those census
tracts whose residents are in the most need of this employment
targeting.  Only those census tracts within the jurisdiction of the
city, county, or city and county that has jurisdiction of the
enterprise zone may be included in a targeted employment area.
   At least a part of each eligible census tract within a targeted
employment area shall be within the territorial jurisdiction of the
city, county, or city and county that has jurisdiction for an
enterprise zone.  If an eligible census tract encompasses the
territorial jurisdiction of two or more local governmental entities,
all of those entities shall be a party to the designation of a
targeted employment area.  However, any one or more of those
entities, by resolution or ordinance, may specify that it shall not
participate in the application as an applicant, but shall agree to
complete all actions stated within the application that apply to its
jurisdiction, if the area is designated.
   Each local governmental entity of each city, county, or city and
county that has jurisdiction of an enterprise zone shall approve, by
resolution or ordinance, the boundaries of its targeted employment
area, regardless of whether a census tract within the proposed
targeted employment area is outside the jurisdiction of the local
governmental entity.
  SEC. 2.  Section 7073 of the Government Code is amended to read:
   7073.  (a) Except as provided in subdivision (e), any city,
county, or city and county with an eligible area within its
jurisdiction may complete a preliminary application for designation
as an enterprise zone.  The applying entity shall establish
definitive boundaries for the proposed enterprise zone and the
targeted employment area.
   (b) (1) In designating enterprise zones, the agency shall select
from the applications submitted those proposed enterprise zones that,
upon a comparison of all of the applications submitted, indicate
that they propose the most effective, innovative, and comprehensive
regulatory, tax, program, and other incentives in attracting private
sector investment in the zone proposed.
   (2) For purposes of this subdivision, regulatory incentives
include, but are not limited to, all of the following:
   (A) The suspension or relaxation of locally originated or modified
building codes, zoning laws, general development plans, or rent
controls.
   (B) The elimination or reduction of fees for applications,
permits, and local government services.
   (C) The establishment of a streamlined permit process.
   (3) For purposes of this subdivision, tax incentives include, but
are not limited to, the elimination or reduction of construction
taxes or business license taxes.
   (4) For the purposes of this subdivision, program and other
incentives may include, but are not limited to, all of the following:

   (A) The provision or expansion of infrastructure.
   (B) The targeting of federal block grant moneys, including small
cities, education, and health and welfare block grants.
   (C) The targeting of economic development grants and loan moneys,
including grant and loan moneys provided by the federal Urban
Development Action Grant program and the federal Economic Development
Administration.
   (D) The targeting of state and federal job disadvantaged and
vocational education grant moneys, including moneys provided by the
federal Job Training Partnership Act of 1982 (P.L. 97-300).
   (E) The targeting of federal or state transportation grant moneys.

   (F) The targeting of federal or state low-income housing and
rental assistance moneys.
   (G) The use of tax allocation bonds, special assessment bonds,
bonds under the Mello-Roos Community Facilities Act of 1982 (Chapter
2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title
5), industrial development bonds, revenue bonds, private activity
bonds, housing bonds, bonds issued pursuant to the Marks-Roos Local
Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of
Chapter 5), certificates of participation, hospital bonds,
redevelopment bonds, school bonds, and all special provisions
provided for under federal tax law for enterprise community or
empowerment zone bonds.
   (5) In the process of designating new enterprise zones, the agency
shall take into consideration the location of existing zones and
make every effort to locate new zones in a manner that will not
adversely affect any existing zones.
   (6) In designating new enterprise zones, the agency shall include
in its criteria the fact that jurisdictions have been declared
disaster areas by the President of the United States within the last
seven years.
   (7) When reviewing and ranking new enterprise zone applications,
the agency shall give special consideration or bonus points, or both,
to applications from jurisdictions that meet at least two of the
following criteria:
   (A) The percentage of households within the census tracts of the
proposed enterprise zone area, the income of which is below the
poverty level, is at least 17.5 percent.
   (B) The average unemployment rate for the census tracts of the
proposed enterprise zone area was not less than five percentage
points above the statewide average for the most recent calendar year
as determined by the Employment Development Department.
   (C) The applicant jurisdiction has, and can document that it has,
a unique distress factor affecting long-term economic development,
including, but not limited to, resource depletion, plant closure,
industry recession, natural disaster, or military base closure.
   (c) In evaluating applications for designation, the agency shall
ensure that applications are not disqualified solely because of
technical deficiencies, and shall provide applicants with an
opportunity to correct the deficiencies.  Applications shall be
disqualified if the deficiencies are not corrected within two weeks.

   (d) (1) Except as provided in paragraph (2), or upon dedesignation
pursuant to subdivision (c) of Section 7076.1 or Section 7076.2, a
designation made by the agency shall be binding for a period of 15
years from the date of the original designation.
   (2) The designation period for any zone designated pursuant to
either Section 7073 or 7085 prior to 1990 may total 20 years, subject
to possible dedesignation pursuant to subdivision (c) of Section
7076.1 or Section 7076.2, if the following requirements are met:
   (A) The zone receives a superior or passing audit pursuant to
subdivision (c) of Section 7076.1.
   (B) The local jurisdictions comprising the zone submit an updated
economic development plan to the agency justifying the need for an
additional five years by defining goals and objectives that still
need to be achieved and indicating what actions are to be taken to
achieve these goals and objectives.
   (e) (1) Notwithstanding any other provision of law, any area
designated as an enterprise zone pursuant to Chapter 12.8 (commencing
with Section 7070) as it read prior to January 1, 1997, or as a
targeted economic development area, neighborhood economic development
area, or program area pursuant to Chapter 12.9 (commencing with
Section 7080) as it read prior to January 1, 1997, or any program
area or part of a program area deemed designated as an enterprise
zone pursuant to Section 7085.5 as it read prior to January 1, 1997,
shall be deemed to be designated as an enterprise zone pursuant to
this chapter.  The effective date of designation of the enterprise
zone shall be that of the original designation of the enterprise zone
pursuant to Chapter 12.8 (commencing with Section 7070) as it read
prior to January 1, 1997, or of the program area pursuant to Chapter
12.9 (commencing with Section 7080) as it read prior to January 1,
1997, and in no event may the total designation period exceed 15
years, except as provided in paragraph (2) of subdivision (d).
   (2) Notwithstanding any other provision of law, any enterprise
zone authorized, but not designated, pursuant to Chapter 12.8
(commencing with Section 7070) as it read prior to January 1, 1997,
shall be allowed to complete the application process started pursuant
to that chapter, and to receive final designation as an enterprise
zone pursuant to this chapter.
   (3) Notwithstanding any other provision of law, any expansion of a
designated enterprise zone or program area authorized pursuant to
Chapter 12.8 (commencing with Section 7070) as it read prior to
January 1, 1997, or Chapter 12.9 (commencing with Section 7080) as it
read prior to January 1, 1997, shall be deemed to be authorized as
an expansion for a designated enterprise zone pursuant to this
chapter.
   (4) No part of this chapter may be construed to require a new
application for designation by an enterprise zone designated pursuant
to Chapter 12.8 (commencing with Section 7070) as it read prior to
January 1, 1997, or a targeted economic development area,
neighborhood economic development area, or program area designated
pursuant to Chapter 12.9 (commencing with Section 7080) as it read
prior to January 1, 1997.
   (f) Notwithstanding any other provision of law, a city, county, or
a city and county may designate a joint powers authority to
administer the enterprise zone.
   (g) No more than 39 enterprise zones may be designated at any one
time pursuant to this chapter, including those deemed designated
pursuant to subdivision (e).  Upon the expiration or termination of a
designation, the agency is authorized to designate another
enterprise zone to maintain a total of 39 enterprise zones.
  SEC. 3.  Section 7073.3 of the Government Code is repealed.
  SEC. 4.  Section 7074 of the Government Code is amended to read:
   7074.  (a) In the case of any enterprise zone, including an
enterprise zone formerly designated as an enterprise zone pursuant to
Chapter 12.8 (commencing with Section 7070) as it read prior to
January 1, 1997, or as a program area pursuant to Chapter 12.9
(commencing with Section 7080) as it read prior to January 1, 1997, a
city or county, or city and county may propose that the enterprise
zone be expanded by 15 percent to include definitive boundaries that
are contiguous to the enterprise zone.
   (b) The agency may approve an enterprise zone expansion proposed
pursuant to this section based on the following criteria:
   (1) Each of the adjacent jurisdictions' governing bodies approves
the expansion by adoption of an ordinance or resolution.
   (2) Land included within the proposed expansion is zoned for
industrial or commercial use.
   (3) Basic infrastructure, including, but not limited to, gas,
water, electrical service, and sewer systems, is available to the
area that would be included in the expansion.
   (c) An enterprise zone may propose to use eligible expansion
allotment to expand into an adjacent jurisdiction pursuant to this
section if the agency finds that all of the following conditions
exist:
   (1) The governing body of the local agency with jurisdiction over
the existing enterprise zone and the governing body of the local
agency with jurisdiction over the proposed expansion area each
approve the expansion by adoption of an ordinance or resolution.  The
ordinance or resolution by the jurisdiction containing the proposed
expansion area shall indicate that the jurisdiction will provide the
same or equivalent local incentives as provided by the jurisdiction
of the existing enterprise zone.
   (2) (A) Land included within the proposed expansion is zoned for
industrial or commercial use.
   (B) An expansion area may contain noncommercial or nonindustrial
land only if that land is a right-of-way and is needed to meet the
requirement for a contiguous expansion between an existing enterprise
zone and a proposed expansion area.
   (3) Basic infrastructure, including, but not limited to, gas,
water, electrical service, and sewer systems, is available to the
area that would be included in the expansion.
   (4) The expansion area is contiguous to the existing enterprise
zone.
   (d) (1) Except as otherwise provided in paragraph (2), in no event
shall an enterprise zone be permitted to expand more than 15 percent
in size from its size on the date of original designation, including
any expansion authorized pursuant to Chapter 12.8 (commencing with
Section 7070), or Chapter 12.9 (commencing with Section 7080), as
those chapters read prior to January 1, 1997.
   (2) If an enterprise zone, on the date of original designation, is
no greater than 13 square miles, it may be permitted to expand up to
20 percent in size from its size on the date of original
designation.
